[Dateline
- Houston, TX
- August 22, 2004] On August 11,
nearly eighteen months after IRS attorneys Kenneth W. McWade and Richard A. Sims
were sited by the 9th Circuit Court of Appeals in San Francisco
for deception, misconduct, withholding evidence, and defrauding the court (read
the Appelate Ruling) the two attorneys have been suspended by their
state bars, and the IRS has suspended them indefinitely.

This is the first time in US history that
IRS attorneys have been suspended by the tax court and their state bar (see
NY Times article below).

Had
it not been for the Herculean efforts of Houston Appellate attorney, Michael
Louis Minns, Sims and McWade's actions would have gone unpunished.

After winning the 9th Circuit's ruling for
1,300 airline pilots, Minns contacted the US Tax Court to demand disciplinary
action. After several months of letter writing and phone calls the US Tax Court
did not respond, so Minns contacted each of the fifty state bar associations to
determine where the two attorneys were licensed. He discovered that Sims was
licensed in Arkansas and McWade was licensed in Oregon. After being advised of
the 9th Circuit's ruling, both states immediately launched investigations, and
Minns was named as the lead witness in the Arkansas case. Oregon advised Minns
of their ruling on August 11th against McWade.

On January 17, 2003, the Ninth Circuit
handed down its ruling to overturn a 1991 Federal Tax Court ruling, whereby
1,300 airline pilots had been assessed more than $10.2 billion in back taxes,
penalties and interest. The IRS case surrounded a tax-sheltered trust they the
pilots has established for their children and their own retirement.

These latest actions will prompt the largest
refunds ever in IRS history, totaling in excess of $2.6 billion.

2 Ex-I.R.S. Lawyers' Licenses Suspended for Misconduct

By DAVID CAY JOHNSTONPublished: August 21, 2004

he
law licenses of two former Internal Revenue Service lawyers have
been suspended for two years after a federal court ruling last
year that they defrauded the courts so that the I.R.S. could win
1,300 tax shelter cases.

W. Kenneth McWade was suspended by the Oregon Supreme Court
in an order dated Aug. 10 and released yesterday by the Oregon
State Bar.

Four months ago Arkansas officials suspended the license of
William A. Sims.

The United States Tax Court has also suspended both lawyers
for two years, and the I.R.S. director of practice has suspended
them indefinitely.

The suspensions followed complaints brought by Michael Louis
Minns, a Houston lawyer who represented 124 of the tax shelter
buyers, most of them airline pilots. One buyer is seeking a $6
million refund.

The Federal Court of Appeals for the Ninth Circuit in San
Francisco found in January 2003 that the lawyers had defrauded
the court by making a corrupt deal with a few of the pilots who
bought tax shelters in the 1970's and 1980's. Under the deal, no
tax-collection actions in regard to the shelters would be taken
against these pilots in return for testimony that would hurt the
others.

The court called this "extreme misconduct" and asked why the
I.R.S. had not disciplined the lawyers, each of whom was paid a
$1,000 bonus for his work on the cases.

Mr. Minns then asked the I.R.S. in which state each was
licensed so that he could seek their disbarment. The I.R.S.
refused, saying disclosure of their law licenses would violate
their confidentiality.

In fighting suspension, the two lawyers filed papers
contending that they had acted properly.

Mr. McWade, reached at home in Hawaii, said, "I guess the
court has decided that Oregon lawyers are not entitled to due
process." Mr. Sims did not respond to voice mail and e-mail
messages.